Following changes has been proposed in Budget 2012 in Section 44AD presumptive Income Scheme :
- Threshold limit for presumptive taxation being increased from R60 Lakh to R1 Crore.
- Under the existing provision of Section 44AD,presumptive taxation is applicable in the case of a small business having turnover not exceeding R60 lakh ,
- whereby 8% of turnover is deemed to be the income of the eligible business.
- The assessee is not required to maintain any books of account nor required to get the accounts audited.
- The Finance Bill, 2012 proposes to raise the threshold limit from R60 lakh to Rs1 crore In tax Audit.
- Accordingly in the case of an assessee having turnover upto R 1 crore, 8% of the turnover shall be deemed to be the income with no hassle of accounts and audit.
Under the proposed tax rate on an income of Rs 8 lakh after claiming deduction of R1 lakh under 80C (LIC/PFF), R15,000 under Section 80D (Medi claim/ Health checkup) the tax liability on taxable income of
Rs 6,85,000 will be just Rs 69,010/- which is 0.7% of the turnover. In case such assessee has taken housing
loan and paying interest thereon of Rs 1,50,000, the tax payable will go down to R38,110/- only. A big relief for a small business considering that turnover of Rs 1 crore per annum means turnover of approx. Rs 30,000 per day.
This amendment shall be effective from 1 April, 2013, i.e., assessment year 2013-14.
Scope of Scheme has been reduced :However, the scope of eligible business is being restricted by excluding
- person earning income in the nature of commission or brokerage and
- person carrying on any agency business.
- Further it is being explicitly provided that small business does not include carrying on of profession.
- This amendment is being made retrospectively with effect from 1 day of April, 2011 i.e. assessment year 2011-12.
The benefit of Section is available to an individual, HUF and Partnership firm only.
Accordingly company and Limited Liability Partnership are outside the scope of presumptive taxation under
Section 44AD of the Act.
Person who opted this scheme is required to file his return on Income Tax return form 4S (sugam)
Person who opted this scheme is required to file his return on Income Tax return form 4S (sugam)
assessee already filled return for AY 2011-12 under ITR 4s does he need to refill retun under itr4 commission or agency business
ReplyDeleteTechnically yes, he has to file return again. Moreover he can not show his income on presumptive basis and have to declare his income on actual basis .
Delete"Small business does not include carrying on of profession" - What will be considered as profession in this case?
ReplyDelete1. A Chartered Accountant providing bookkeeping services to clients.
2. A Commerce graduate providing bookkeeping services to clients.
3. An Arts graduate providing bookkeeping services to clients.
4. All of the above.